Finance Bill 2023 passed in Lok Sabha with over 45 amendments

Posted on    24 March 2023

The Lok Sabha on Friday, March 24, passed the Finance Bill, 2023 with some amendments. Union Finance Minister Nirmala Sitharaman tabled 'The Finance Bill, 2023' in the lower house amid sloganeering by Opposition MPs demanding a JPC inquiry into the Adani Group issue. FM Sitharaman said that a committee will be set up under Finance Secretary on the pension system to address the needs of employees and also maintain fiscal prudence.

The Finance Bill has proposed some amendments. One such amendment is investments in mutual funds with up to 35% equity exposure to domestic companies, essentially debt funds, are liable to be taxed as per the investors' income tax slab rate.

This brings the taxation treatment for debt funds on a par with any other bank fixed deposits, where the capital gains are added to the investor's income and taxed at his or her slab rates.

So, now an investor regardless of his or her holding period in a debt mutual fund (previously, LTCG was applicable after three years), will be taxed as per his/her slab. If the investor falls under the highest income tax slab rate of 30%, then he or she will have to pay 35.8% (including surcharge and cess) on their gains without any indexation benefit.



While moving the Finance Bill 2023 in the Lok Sabha for consideration and passage, the minister also said the RBI will look into the issues related to credit card payments for foreign tours not being captured under Liberalised Remittances Scheme (LRS).

Representations have been received that the national pension system for government employees needs to be improved, Sitharaman said.

"I propose to set up a committee under the finance secretary to look into this issue of pension and evolve an approach which addresses the need of employees while maintaining fiscal prudence to protect the common citizens. The approach will be designed for adoption by both central and state governments," the minister said.

The minister further said it has come to notice that payment for foreign tours through credit cards are not being captured under LRS and such payments escape tax collection at source.

"RBI is being requested to look into this with a view to bringing credit card payments for foreign tours within the ambit of LRS and tax collection at the source there on," she announced.

Several opposition members were in the well of the House raising slogans demanding the setting up of a joint parliamentary committee probe into the allegations against the Adani group of companies.

Amendments (as introduced in Lok Sabha) can be accessed from the attached file

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